A plan to redevelop the former Madison Street Kmart and an adjoining outparcel with a new restaurant and retailers gained a boost Wednesday through approval of a local tax abatement incentive.

The Clarksville-Montgomery County Industrial Development Board OK'd the payment-in-lieu-of-tax (PILOT) agreement, which grants Chattanooga development firm Rise Partners an annually-graduated property tax break.

Matt Phillips, founding partner for the development firm, shared details of the highly-anticipated project with the IDB in its monthly meeting Wednesday. He had previously addressed the Clarksville City Council about it.

The entire, former Kmart building, an 85,000-square-foot structure at 2300 Madison St., is expected to get a face-lift with a heightened roofline, and is to be subdivided into five retail spaces.

Fronting the old Kmart is an abandoned fuel station that is to be demolished and replaced with an 8,000-square-foot building — probably a restaurant, Phillips says.

All of the retailers are expected to represent major national brands. They are currently undisclosed, as Phillips says negotiations continue.

Also on that old Kmart shopping center property, which has been collectively called Clarksville Commons, is the Food Lion grocery store, which Phillips said is planning a makeover of its own, and the outlot Wendy's restaurant which will also remain.

The Kmart project represents a $12 million capital investment, that, studies suggest, will generate an estimated $18.5 million in combined annual retail sales, and close to $1.8 million in annual sales taxes.

All of the businesses in the project, combined, are expected to create about 427 new jobs.

Officials say they expect to close on the deal in November. Demolition and construction could start next summer.

Rise Partners' track record

As described on its website, Rise Partners is a commercial real estate development, acquisition and redevelopment company, founded in Chattanooga by Geoff Smith, Matt Phillips and Jay Wiseman. Shortly after, Greg Wilson joined the company as a partner and established its Charlotte, N.C. office.

Combined, Smith and Phillips have over 10 million square feet of development and redevelopment experience across 12 states, totaling approximately $1.7 billion of project costs, while Wiseman brings $7 billion of acquisition experience.

The team has decades of experience across many property types, including large regional power centers, regional malls, neighborhood grocery anchored centers, community centers, single tenant net leased buildings, distribution centers, office buildings and mixed-use developments.